Mobileye Global, Inc. Class A ((MBLY)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Mobileye Global, Inc. Class A recently held its earnings call, revealing a positive sentiment overall. The company reported significant revenue growth and increased operating cash flow, driven by strategic advancements in the ADAS and robotaxi markets. Despite some challenges in gross margins due to product mix and pricing issues in China, the business outlook remains robust with increased guidance and successful strategic initiatives.
Revenue and Operating Cash Flow Growth
Mobileye reported a Q3 revenue of $504 million, marking a 4% year-over-year increase, largely attributed to an 8% growth in EyeQ volume. The operating cash flow reached $167 million in Q3, contributing to a year-to-date total of nearly $500 million, which is approximately a 150% increase year-over-year.
Increased Full Year Outlook
The company raised the midpoint of its full-year outlook, with a 2% increase in revenue and an 11% rise in adjusted operating income. Compared to the initial 2025 guidance, these figures represent a 7% increase in revenue and a 27% increase in operating income at the midpoint.
Strong Performance in China
Mobileye experienced better-than-expected results in China, driven by shipments to Chinese OEMs and top 10 Western OEM customers. This performance has been a significant contributor to the company’s overall success.
Surround ADAS Program Wins
The company received confirmation from a leading Western OEM for a high-volume EyeQ6 high-based surround ADAS program, marking a significant milestone in its strategic initiatives.
Robotaxi Advancements
Mobileye successfully completed the first closed-loop testing with the Holon production vehicle and is on track to remove safety drivers in the first U.S. city by 2026, showcasing its advancements in the robotaxi sector.
Gross Margin Pressure
Despite the positive growth, Mobileye faced a decline in gross margin by just over 100 basis points year-over-year. The EyeQ ASP decreased by about $0.50 year-over-year, primarily due to higher volumes from Chinese OEMs where pricing remains a significant challenge.
EyeQ5 Volume Impact
The higher volume of ADAS programs based on EyeQ5, which carry lower gross margins due to higher costs, continues to exert pressure on the company’s financials.
Forward-Looking Guidance
Mobileye’s updated guidance indicates strong performance and optimistic projections for the year. The company anticipates its 2025 volumes to exceed initial guidance by about 2 million units, driven by stronger-than-expected launch activity, ADAS adoption growth, and favorable results in China. The advancements in surround ADAS and new customer engagements position Mobileye well for future growth in the ADAS and autonomy markets.
In conclusion, Mobileye’s earnings call reflects a positive sentiment with significant revenue growth and strategic advancements. Despite challenges in gross margins, the company’s increased guidance and strong performance in key markets like China highlight its robust business outlook and potential for future growth.